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Competition watchdog scrutinizes Amcor takeover plans

By Rory Harrington , 29-Nov-2011

The Australian competition watchdog confirmed it is probing Amcor’s proposed takeover of packaging company Aperio Group to see if the deal would damage competition in the domestic market.

The Australian Competition and Consumer Commission (ACCC) has called for industry feedback on the planned acquisition which would see Victoria-based Amcor Ltd further enlarge its presence in Australasia and South East Asia.

The buyout, should it be approved, would see Amcor strengthen its already significant grip on the regional market.

Leading players

A letter from the ACCC outlines how both companies have a substantial present in the region

Global giant Amcor has both rigid and flexible operations spread across 300 sites in 42 countries. Its Asia Pacific flexible division has 20 plants operating in seven countries including Australia, said the body.

Aperio is dubbed as “one of Australia’s largest suppliers of flexible packaging” serving a host of food sectors including bakery, confectionery, dairy, frozen products, as well as beverage applications.

The Melbourne-based firm has 12 factories spread throughout the region; seven in Australia, four in New Zealand and a single site in Thailand. Its portfolio also includes extrusion, printing, lamination, slitting and converting, said the competition authority.

Effect on market

Given the sizeable market share both firms have the ACCC said it was considering whether the transaction may breach section 50 of the Competition and Consumer Act 2010 which guards against “acquisitions that substantially lessen competition in a market, or are likely to do so”.

“The ACCC is seeking the views of marketing participants to enable it to assess the likely effect of the proposed acquisition”, it added.

The watchdog has provided a list of suggested topics for flexible packing manufacturers, importers and purchasers to comment on

These include end-use categories in food and personal care and how these are sourced or supplied. The ACCC was also keen to hear about how easy it is to switch between, expand to supply different end-use segments and any barrier – including cost – that might exist.

Companies can comment on the extent of competition provide by smaller-scale flexible suppliers to major players such as Amcor and Aperio.

Closing date for submission is Friday 2 December and the ACCC said it was scheduled to deliver its verdict on 25 January 2012.

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